Will Corporate Raider Acquisition Resurrect HP?

Rumors amassed on Twitter yesterday speculating on the potential purchase of Hewlett Packard, which is currently beset with difficulties. The acquisition may be pushed by Carl Icahn, the billionaire investor and corporate raider.

The Palo Alto, California-based HP has a policy of refusing to comment on rumors, and a HP spokesperson declined to offer any information as per the company policy.

Amidst speculation that Icahn was seeking to introduce radical changes to HP's operations, HP shares were up four percent to $14.37 yesterday. Icahn's career has been built up on the acquisition of undervalued companies and transforming them in order to push up the value of those companies. It has been rumored that the billionaire investor is purchasing shares and building a stake in HP.

Earlier this month, Icahn abandoned his bid to purchase Oshkosh, the truck maker, due to less that 25 percent of the shares being tendered.

Last month (on November 20), HP shares fell to their lowest level in over a decade. This drop followed the company's announcement that it would be taking an $8.8 billion charge against earnings after the revelation that HP called “serious accounting improprieties” at Autonomy. This year, HP shares have fallen 44 percent.

One HP partner stated: “Icahn is known for buying dollar bills for 50 cents and then holding the board hostage if he doesn't get his return, so it could be an indication of a company whose stock is undervalued or it could be an indication of a history of disruptive behaviors from HP disrupting the company, its partners and its shareholders. He goes in and buys stuff at a value. The problem is he can turn into a real pistol.”

Additionally, a further HP partner said that such drama is not needed at HP; this partner had recently bought shares in HP. He nevertheless said: “I'm glad I bought HP stock. [The rumors point] out HP is undervalued.” (CY) Link